Affected by factors such as the sharp drop in cost-end crude oil prices, intensified overseas tightening, and weak domestic demand, the polyester sector has overall weakened recently, and there has been a certain internal differentiation. As of yesterday’s intraday close, PTA futures, ethylene glycol futures, and short fiber futures fell by 3.12%, 9.24%, and 4.3% respectively this week. Among the three varieties, ethylene glycol performed the worst.
In fact, ethylene glycol has fallen sharply for many consecutive trading days, which has a certain relationship with its own fundamentals of high inventory.
According to Tianfeng Futures analyst Liu Siqi, ethylene glycol quickly accumulated in the first half of the year, and the absolute inventory rebounded to a historical high level of 1.2 million tons. The macro sentiment was pessimistic, funds were “empty allocated” to varieties with excess production capacity, and the cost side also dropped sharply. Drive the glycol oscillation downward. “A safety accident occurred at the ethylene glycol unit in Shanghai last Saturday. There are reports that low-load operation may be one of the causes of the accident. The market’s concerns about the increase in ethylene glycol load have intensified the problem of increased ethylene glycol load and accumulated storage. Pressure. Based on this, ethylene glycol performed the most sluggishly among the three varieties.
CCF statistics show that port inventories in East China’s main ports continue to accumulate 57,000 tons to 1.235 million tons on a weekly basis, mainly affected by the arrival of large ships in the Taicang area. “With the market’s expected inventory turning point constantly being falsified, ethylene glycol, whose price has rebounded in the early stage, has once again become a ‘short allocation’ variety in the market.” Guan Di, an analyst at SDIC Essence Futures, said.
At present, the entire polyester market is still in the dilemma of high costs, weak demand, high inventory, and low profits.
“From a fundamental perspective, the drag on demand is also the main factor behind the weakness of polyester. In a short period of time, terminal operations have been low, and the situation of high polyester inventory and low profits is difficult to truly effectively solve. Affected by this, the polyester industry chain has It is difficult to make a big improvement, and the performance is weak in the chemical industry.” Zhu Lihang, an analyst at Zheshang Futures, said.
In Guandi’s view, the “618” shopping festival has passed and is still in the seasonal off-season. Although the demand for clothing and textiles in the later period is expected to recover as the domestic epidemic situation improves and economic stimulus policies increase, the improvement is hardly optimistic.
“Before the peak season of terminal demand arrives, the prices of the entire polyester industry chain will still passively follow the fluctuations of the upstream cost end. The recovery of processing profits of midstream and downstream varieties needs to be achieved by reducing its own supply or the fall of the upstream raw material end.” Guandi said .
Liu Siqi said that the subsequent evolution of the polyester industry chain mainly depends on the trend of cost-end crude oil. After the Federal Reserve sharply raised interest rates, the market macro sentiment was pessimistic, and crude oil prices were in a weak state. From the perspective of crude oil fundamentals, the supply shortage and low inventory problems caused by the Russia-Ukraine conflict have not yet been resolved. The fundamentals are still relatively bullish. There may be a recovery market after macroeconomic sentiment stabilizes. The polyester industry chain varieties can be maintained to a certain extent. Stabilizing and recovering.
“Before the high inventory is reduced, ethylene glycol does not have the basis for a sharp rebound. The absolute price will follow the fluctuation of cost-end oil prices, and it will be difficult to significantly repair its own profits.” Zhu Lihang said.
In Liu Siqi’s view, the price of ethylene glycol futures is already close to the previous low, and the overall valuation is low. It is not advisable to be overly bearish at the low level. However, the problem of high inventory is difficult to solve and there is a lack of upward drive. The trend will still remain weak in the short term.
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